Fraser Institute fails to note that major public programs financed by taxes improve the social and economic life of Canadians.

Failing to acknowledge the necessity of government programs and the individual benefits they provide through collective action is misleading at best, as it deprives us from the big public policy picture through which we should understand taxation.

By:Jennifer Wallner and Daniel Béland Published on Thu Aug 14 2014

“The average Canadian family spends less on basic necessities thanks to taxes and the government programs they support.”

That should have been Tuesday’s headline blasted by the media. Instead, a recent study from the Fraser Institute pushed the opposite message. The study, however, is fundamentally flawed.

Tracking the total tax bill of the average Canadian family from 1961 to 2013, the authors claim that taxes have grown more rapidly than any other single expenditure, like housing, clothing, food and education.

What the study fails to report is that, thanks to government programs, Canadians are paying less for many of these necessities. Government programs that are paid for by, you guessed it, taxes.

In 1961, there was no universal health care, limited public education, limited public transportation systems and the Trans-Canada Highway wasn’t even open.

Consider education. In 1961, less than 10 per cent of Canadian schools had libraries. By 1972 that number had jumped to 57.8 per cent.

Only 20 per cent of teachers in the 1950s had university degrees. By the 1970s that number had jumped to just under 60 per cent and today all teachers have university qualifications.

In 1990, just under 40 per cent of Canadians didn’t even have a high-school diploma. Now that number is less than 20 per cent.

In 1961, only 174,658 Canadians were enrolled in a post-secondary education program. By 1975, that number jumped to 585,095. By 2012, more than 50 per cent of Canadians aged 15 and over had some form of trade certificate, college diploma or university degree. This was an increase of 20.9 per cent since 1990.

And what are all these investments in education getting us? Today, according to the Organization for Economic Cooperation and Development, Canada leads the world in highly educated adults, performs well on international tests, and provides an equal quality of education to Canadians regardless of where they live in the country.

Is Canadian education perfect? Absolutely not. For example, the education offered to Aboriginal Peoples lags way behind. Former prime minister Paul Martin put the shortfall for on-reserve education in the range of $2,000 to $3,000 per pupil, compared with those in schools run by the provinces. About 60 per cent of aboriginal on-reserve high-school students drop out, compared with only 9.5 per cent of non-aboriginal Canada. This is a problem that must be addressed.

Keeping careful watch on the quality of programs provided by the government and paid through public taxes is our democratic responsibility.

Failing to acknowledge the necessity of these programs and the individual benefits they provide through collective action is misleading at best, as it deprives us from the big public policy picture through which we should understand taxation.

The truth of the matter, however, is that the Fraser Institute is an organization that is devoted to a clear ideological cause. As stated on its website, its “vision is a free and prosperous world where individuals benefit from greater choice, competitive markets, and personal responsibility.” Importantly, this statement does not mention government, as the Fraser Institute advocates a limited role for it. In this context, lower taxes as a way to “starve the beast” and reduce the size of government.

This is something that the extensive media coverage surrounding the Fraser Institute and its latest report does not say. Although the Fraser Institute is clearly non-partisan, it is guided by a strong ideological creed that media reports should acknowledge instead of uncritically disseminating misleading information and make it pass for objective, detached knowledge.

The latest report on taxation is a case in point in using misleading information to infuriate Canadians about taxes rather than make them see the big picture about why taxes are the way they are in the first place, and how the major public programs they finance improve the social and economic life of Canadians.

As Oliver Wendell Holmes once claimed, “Taxes are what we pay for civilized society.” This was the case in the past and this is even more the case today, regardless of what the Fraser Institute wants you to believe.

Jennifer Wallner’s book on Canadian education, Learning to School, was just published by University of Toronto Press. Jennifer.wallner@uottawa.ca @wallprof

Daniel Béland is Canada Research Chair in Public Policy at the Johnson-Shoyama Graduate School of Public Policy. He has published a dozen books and numerous articles on fiscal and social policy. daniel.beland@usask.ca @danielbeland

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